Micro-finance Interest Rate Cut

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Written by DAP NEWS -- Wednesday, 09 September 2009

Private Micro-Finance Institutions (MFIs) in Cambodia on Tuesday agreed to lower their rate to 0.2 and 0.75 percent per month. The Cambo- dian Network of Farmers (CNF) welcomed the news, saying it gives a chance to small scale business and the agricultural sector.

CNF Chief of Network Resource Ourn Sophal said that “This is good news; all Cambodian farmers can borrow money from the private sector to develop their rice fields or do small scale businesses very easily because the private micro-sector rate is now cheaper than before.”

“Moreover, all farmers can take money to extend their production, [with additions like] like animal husbandry and growing multiple vegetables,” Sophal added. Director of Cambodian Association Micro-Finance Hourt Eng Tong announced on Tuesday that “All private Micro-Finance in Cambodia agreed to discount the charged rate a month only 0.2 to 0.75 percent.”

Micro-Finance is trying to help all Cambodians start businesses or boost farming .

The Cambodia Center for Study and Development in Agriculture (CEDAC) also welcomed the lower rate.

Yang Saing Komar, CEDAC director, called it a “first stage.”

“All Cambodians will benefit from this program. In the past, all MFIs charged more than now.”

The CEDAC director asked all Cambodians, especially those in rural communities, to save money. He said building savings was better than borrowing.

In the past, MFIs charged as much as 3 percent a month. Houses, land and assets have been confiscated because of unpaid loans, Ourn Sophal said.

Some farmers have borrowed without investing in a business or expanded agriculture, Ourn Sophal added.